Sessions Drama Highlights Importance of Cannabis Diversification
March 8th, 2017
The regulatory environment surrounding medical marijuana has been complicated by President Donald Trump and his Attorney General pick Jeff Sessions. Despite recent reassurances, investors may want to take a look at diversifying their exposure to so-called “pure-play” investments with companies involved in ancillary industries that don’t necessarily touch the psychoactive components of the plant at the source of the controversy.
In this article, we will take a closer look at the evolving political risks surrounding the cannabis industry and why Medical Marijuana Inc. (OTC Pink: MJNA) represents a compelling opportunity given its diversified portfolio of subsidiaries and investments.
Attorney General Jeff Sessions isn’t exactly known for his friendliness towards the cannabis industry. In the past, he has called marijuana reform a “tragic mistake” and criticized FBI Director James Comey and Attorney General Eric Holder and Loretta Lynch for not enforcing the federal prohibition on the drug. He has even gone so far as saying that “good people don’t smoke marijuana” and that it is a “very real danger” to society.
Many Democrats and Libertarian-leaning Republicans expressed concerns over these comments and the potential to overturn the Obama-era policy permitting state-level marijuana legalization. A bipartisan group of Senators led by Sens Elizabeth Warren (D-Mass.) and Lisa Murkowski (R-Alaska) recently sent a letter to Sessions urging him to uphold the prevailing policy after the Trump administration hinted that it would crack down on the industry.
Sessions responded by privately reassuring Republican senators that he wouldn’t deviate from the Obama-era policy. But, Sessions’ and Trump’s opposition to legalized marijuana mean that these reassurances may not be as strong as Obama-era policies. White House Press Secretary Sean Spicer’s comments that recreational marijuana would be subject to “greater enforcement” also opens the door to orders coming from higher up the chain to crack down.
Medical Marijuana Inc. is not the typical “weed company” that many people think, but rather a highly-diversified conglomerate that shares a common core – cannabis. According to its most recent annual report, the company has an interest in eight different subsidiaries involved in businesses including nutraceuticals, pharmaceuticals, sales/marketing, and consulting among others, which provides investors with a high level of diversification.
These subsidiaries include (with MJNA’s percent interest):
- HempMedsPX LLC (100%)
- Wellness Managed Services LLC (80%)
- Red Dice Holdings LLC (100%)
- CanChew® Biotechnologies LLC (50%)
- Hempwire LLC (50%)
- Kannaway LLC (100%)
- HempVap LLC (50%)
- HempMeds Brasil (93.4%)
The company’s largest businesses include its Real Scientific Hemp Oil (RSHO) hemp-based cannabidiol (CBD) oil, which is distributed around the world through various subsidiaries. In addition to this business, the company’s CanChew subsidiary is focused on the treatment of pain and other medical disorders via its chewing gum-based cannabinoid medical products, which will be released as a prescription and over-the-counter product.
The company also holds investments in KannaLife Sciences Inc. (16.7%) and AXIM Biotechnologies Inc. (OTCQB: AXIM) (45.5%), which provide further exposure to different areas of the cannabis industry. AXIM alone, with its approximately $450 million market cap, offers a lot of upside for MJNA investors with its drug development pipeline and current clinical trial program.
Medical Marijuana Inc. (OTC Pink: MJNA) represents a compelling opportunity to invest in the legal cannabis industry without as much regulatory risk as “pure-play” companies. With eight operating subsidiaries, the company offers investors significant diversification across areas like pharmaceuticals, nutraceuticals, consulting, and sales/marketing. Investors interested in the space may want to take a closer look at the stock sooner rather than later.
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